The transfer of the policy is a transfer of value (
IHTM04024), and the claim is on the
value of the policy at the date of transfer for IHT purposes. What
this value is set out at
IHTM20231.
In addition if the deceased paid any premiums on the policy
after the transfer, each payment is also a transfer of value. The
claim is on the amount of each premium (
IHTM20082).
The transfer should be notified on form IHT403 - see
procedural instructions at
IHTM20041 onwards.
If there is a reservation to the donor, there may be an
alternative claim under the Gift With Reservation (GWR) (
IHTM14025) rules if the policy was
given to a non-exempt beneficiary.
